Yunfeng Financial Group, backed by Alibaba founder Jack Ma, said it would be the main investor in a $1.7 billion acquisition of U.S.-based insurer MassMutual International's Asia unit — a deal that sent Yunfeng's shares surging more than 20 percent.

Yunfeng will own 60 percent of MassMutual Asia, while investors including Alibaba Group affiliate Ant Financial Services and Singapore sovereign wealth fund GIC-managed City-Scape will own the rest.

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Jack Ma, founder of the Alibaba Group attends the 2017 forum on rural headmasters on July 12, 2017 in Hangzhou, Zhejiang province of China.

Yunfeng will pay MassMutual $1 billion in cash and 800 million shares valued at HK$6.50 apiece, the companies said in a statement late on Thursday.

Yunfeng's shares were 22 percent higher at HK$7.73 in early trade after soaring as much as 30 percent.

MassMutual Asia has two main units — one manages general insurance business, while the other focuses on the Mandatory Provident Fund business, a compulsory pension plan for the retirement of residents in Hong Kong.

Reorient Financial Markets, a wholly-owned unit of Yunfeng and JPMorgan acted as Yunfeng's financial advisors on the deal, while Citigroup advised MassMutual International, the statement said.